When you buy a newly built home or condo in Ontario, it comes with warranties through the Tarion Warranty Corporation. There are certain warranties that you are entitled to by law. Newly built homes have either 1-year, 2-year and 7-year warranties. They cover elements such as:
The warranties also cover delayed closing and occupancy. You also have other protections, such as deposit protection. Warranties will usually take effect on the date of possession. They stay in effect even if the owner sells the house or condo unit before the end of the warranty period. Coverage may vary depending on the type of home you buy.
To avoid unknowingly taking part in mortgage fraud, be suspicious if you are:
When buying a newly built condo:
You have the right to cancel the purchase within 10 days (called a “cooling off period”)
You can cancel a sales agreement within 10 days of being informed of a significant change (called a “material change”) to the disclosure statement
If you make a deposit, the developer must make sure that it is held in trust
If you decide to cancel, the developer generally must refund any deposits plus any interest that may be payable
The developer must take all reasonable steps to complete the project
As of January 1, 2019, all buyers of units in a standard or phased residential pre-construction condominium project must be given an information sheet with their agreements of purchase and sale that clearly outlines the possible risks of buying a unit in a pre-construction condominium project, including early termination conditions, timelines and the project status.
This is only applicable to condominium projects where the initial agreement of purchase and sale was signed after January 1, 2019.
When buying a resale condo:
Once you’ve signed the agreement of purchase & sale, you or your real estate agent will forward a copy of all the documents to your lawyer. Your lawyer will then search the title of the property. Your agreement of purchase & sale requires that you are going to receive title to the property free and clear. Any anomalies will be addressed when they are discovered.
Before the closing of the property, your lawyer will start to prepare the closing documents. They will coordinate with your bank and mortgage broker (if applicable) to obtain documents needed for any financing. A lawyer will also arrange for you to sign any mortgage documents and make arrangements for funding to the lawyer’s trust account from the mortgage proceeds.
They will also show you a purchaser’s statement of adjustments that give you a balance outstanding that you have to come up with before closing (normally need to provide this amount to your lawyer two days beforehand) and lastly prepare all documents for filing electronically in the land registry office on the closing date.
The closing day duties of a real estate lawyer are very important to the finalizing of the paperwork for your house. They will search the title of the property to make sure there are no last-minute claims against the title, release funds held in his trust account and send any amount owing to the seller’s lawyer and pay any money required on the date of closing as outlined in the statement of adjustments. For new construction condos, they will also receive a copy of the certificate of possession from the New Home Warranty Program.